Site Mobile Navigation

Tea Party Mischief on Exports

In one of their odder quests, some Tea Party members have decided that the United States must shut down the Export-Import Bank of the United States, an obscure but important federal agency that helps American businesses sell their goods abroad.

The bank provides loans and loan guarantees to foreign businesses to help them buy American products and services. In an ideal world, businesses would obtain such financing from privately owned banks. But most governments around the world support exports in similar ways, and if the United States dismantled the bank unilaterally, as some lawmakers are advocating, American companies could lose billions of dollars in overseas orders and decide to move their operations to other countries that provide generous export financing.

Representative Jeb Hensarling, a Republican from Texas who is leading the charge against the Ex-Im Bank, seems oblivious to those facts. He and others see the bank as a symbol of corporate welfare and want Congress to close it down when its authorization ends on Sept. 30. Other groups and businesses opposed to the bank include the Heritage Foundation and Delta Air Lines, which argues that the bank’s loans and guarantees helps foreign airlines buy Boeing planes at lower cost than domestic airlines can. The bank is actually a very poor symbol of corporate welfare. The interest and fees from its loans earn a healthy profit (last year it earned more than $1 billion for the Treasury), and its default rate is less than 1 percent.

Critics have seized on a Congressional Budget Office analysis showing that under one accounting method, which the government does not use, the bank’s six largest programs would lose $2 billion over 10 years. Under Congress’s preferred accounting method, these programs actually earn $14 billion over the same period.

A truly serious crackdown on corporate welfare would involve eliminating corporate tax breaks and wasteful subsidies. But this is not a direction many in the Tea Party want to go in; the bank is a far smaller and easier target than the tax code or the farm lobby.

Though Mr. Hensarling has clout as chairman of the House Financial Services Committee, the bank has strong support elsewhere in Congress. Most Republicans and the Chamber of Commerce and the National Association of Manufacturers support reauthorization, as do most Democrats and the A.F.L.-C.I.O. Congress should ignore the ridiculous arguments against the bank and reauthorize it.